Savings do not invest

The diagnosis for Europe to gain competitiveness and avoid sinking into irrelevance is clear: we must invest more in key sectors and in European integration. To achieve this, we must generate investment resources by mobilizing savings toward European capital markets. These European capital markets are in free fall in trading volumes and listed companies, and are stagnant in capitalization. In Europe and, of course, in Spain. The umpteenth project to boost IPOs, making it easier for companies to choose to list on the markets, has recently been announced. It is the well-intentioned BME Easy Access, which the CNMV and the Spanish markets have jointly presented.

These attempts to boost market supply overlook the other side of the coin: investors, who are even more scarce than listed companies. And this is precisely when the European competitiveness strategy clearly states that it is essential for our savings to be converted into investments and directed more toward European companies. This is to increase productivity, to diversify the financing of SMEs, and, via the higher returns on stock market investments compared to those on deposits and debt, to supplement our fragile public pensions for the future. Now, of the minority portion of our savings that is already invested, a significant amount is flying to destinations, especially the US, where they find more liquid markets and more innovative and profitable companies. To alleviate this, the recipe is to integrate EU markets and make it easier for European citizens to invest more and in Europe.

Drain If European savings are flying to the US, it is because they find there what is lacking here: innovation, liquidity and profitability.

This requires initiating feasible policies, but they depend on EU Member States. And in Europe, this requires extremely complicated consensus. First, we must generate the nudge , Thaler's little push, by facilitating investment with better tax conditions, regulatory simplicity, and financial reputation, perhaps providing guarantees and, certainly, helping people overcome their fear of investing. The tax incentive is the most complex because it means, for anxious tax-collecting states, giving up in the short term income that, in our latitudes, is the most popular or populist: those derived from capital gains taxes. Second, we must improve financial literacy if we want to change the mistaken perception that, in the long term, a poorly remunerated account is safer than investing in companies, that is, in the economy. Financial literacy also depends on states and is advancing at a snail's pace. Finally, like a fish chasing its tail, we need companies in Europe that are more attractive in size and potential on the public markets (stock exchanges), and more innovative and risk-taking companies on the private capital markets. If Europe responds to all this with its usual apathy and paralysis (or perhaps political incapacity?), we shouldn't be surprised that savings aren't being invested.